Displaying items by tag: Investigation

Philippines: The National Coalition of Filipino Consumers (NCFC) has asked the Department of Trade and Industry (DTI) to investigate alleged sales of substandard cement. The NCFC ran its own investigation and conducted test purchases, according to the Manila Bulletin newspaper, after receiving reports that substandard cement was being sold in La Union, Davao and in Caloocan City. It found expired, mislabelled and unlabelled products.

Philippines: The Philippine Competition Commission (PCC) expects to complete an investigation in alleged violations of competitive practice by the cement industry by 2019. PCC commissioner Stella Quimbo made the comments at a forum on the Philippines Competition Act (PCA), according to the Philippines Star newspaper. The investigation follows a probe earlier in 2017 in which the commission says it found reasonable grounds to proceed based on allegations made by the former trade undersecretary Victorio Dimagiba. According to a legal statement made by Dimagiba, the Cement Manufacturers Association of the Philippines (CEMAP), led by its president Ernesto Ordonez, Lafarge Holcim Philippines and Republic Cement and Building Materials violated the provisions of the PCA by engaging in anti-competitive agreements.

Colombia: The Office of the Attorney General is preparing to present charges against three individuals involved in the sale of property in Maceo, Antioquia to Cemex for a new cement plant project. They are Edgar Ramirez Martinez, the former deputy director of Planning at Cemex, Camilo Gonzalez Tellez, the former legal director of Cemex Colombia and Eugenio Correa Diaz, the representative of CI Calizas, which sold the property to the cement producer, according to the El Tiempo newspaper.

The former employees of Cemex allegedly paid US$13.7m to Correa, despite being aware of the fact that the property, which formerly belonged to the deceased businessman Jose Aldemar Moncada, was in the process of being expropriated over unpaid taxes. It is also alleged that the funds never reached the accounts of CI Calizas, having been primarily used to pay off debts of Aldemar Moncada.

Switzerland: Eric Olsen, the chief executive officer (CEO) of LafargeHolcim, has resigned from the company following the completion of a review into a conduct of a cement plant in Syria. An independent internal investigation concluded that the a number of measures taken to continue safe operations at the plant were ‘unacceptable’ and ‘significant’ errors of judgement were made that contravened the applicable code of conduct. Although Olsen was not found personally culpable or even aware of the misconduct by the board of directors he has resigned to draw a line under the affair.

The review examined allegations that company personnel had struck deals with armed groups and sanctioned parties during 2013 until the plant closed in September 2014. The findings also confirmed that selected members of group management were aware of the situation. Remedial measures announced in March 2017 will be taken including: the adoption of a more rigorous risk assessment process focusing on high risk third parties; introduction of a restricted party screening program and a new sanctions and export control program; as well as continuation of other efforts from an external benchmarking exercise. Eric Olsen and his executive management team will implement the remedial measures supported by the Ethics, Integrity & Risk Committee.

“Although I appreciate that those responsible for the Syrian operations appear to have acted in a manner they believed was in the best interests of the company and its employees, there can be no compromise when it comes to compliance rules and adherence to the standards set out in the company’s code of conduct, no matter what the operational challenges are. We are absolutely committed to ensuring that events like those that occurred in Syria must never happen again at LafargeHolcim,” said Beat Hess, chairman of the board of LafargeHolcim.

Olsen will leave LafargeHolcim on 15 July 2017. Hess will become interim CEO whilst a replacement is found. Roland Köhler, currently an executive committee member with responsibility for Europe, Australia/New Zealand and Trading, will be appointed chief operating officer.

Philippines: Arsenio Balisacan, the chairman of the Philippine Competition Commission (PCC), says that the commission has 90 days in which to conduct an investigation into the local cement industry. It is expected to complete its probe in the first half of 2017, according to the Manila Bulletin newspaper. The investigation period follows the point at which the PCC found reasonable grounds of alleged violations of competitive practice. Potential fines the local industry could face are US$2m for a first offence and US$5m for a second.

The PCC announced in early March 2017 that was preparing to investigate the cement sector for alleged violations of competitive practice following a legal statement by Victorio Dimagiba, the head of Laban Konsyumer – a consumer rights organisation, accusing the Cement Manufacturers Association of the Philippines (CEMAP), LafargeHolcim Philippines and Republic Cement and Building Materials of engaging in anti-competitive agreements.

Philippines: The Philippine Competition Commission (PCC) is preparing to investigate the cement industry for alleged violations of competitive practice. It says it has found reasonable grounds to proceed to a full administrative investigation on the cement industry for possible violations of Sections 14 and 15 of the Philippine Competition Act, according to the Philippine Star newspaper. This follows a legal statement by Victorio Dimagiba, a former trade undersecretary, in August 2016 accusing the Cement Manufacturers Association of the Philippines (CEMAP), LafargeHolcim Philippines and Republic Cement and Building Materials of engaging in anti-competitive agreements.

Dimagiba has accused the cement producers of striking illegal agreements including, “restricting competition as to price or components thereof or other terms of trade, abusing their dominant position by engaging in conduct that substantially prevents, restricts, or lessens competition, imposing barriers to entry, or committing acts that prevent competitors from growing within the market.” He has also alleged that Ernesto Ordonez, the head of CEMAP, has used the trade association to justify violating the Philippine Competition Act, as well as maintaining prices of domestic cement in the retail market ‘unreasonably’ high.

Ordonez responded to the claims saying that he was puzzled about the PCC’s decision and that CEMAP had not been informed about a preliminary inquiry.

Syria: LafargeHolcim has accepted that its conduct at a cement plant in Syria in 2013 and 2014 was ‘unacceptable.’ An internal investigation by the group into Lafarge’s behaviour has reported that staff committed ‘significant errors in judgment.’ The probe, supervised of the Finance and Audit Committee of the Board, was started in response to media allegations in 2016 that legacy Lafarge operations had engaged in dealings with armed groups and with sanctioned parties during 2013 until the plant was ultimately evacuated in September 2014.

The investigation has found that the Lafarge subsidiary appears to have provided funds to third parties to work out arrangements with a number of armed groups, including sanctioned parties, in order to maintain operations and ensure safe passage of employees and supplies to and from the plant. The investigation could not establish with certainty the ultimate recipients of funds beyond those third parties engaged. However, LafargeHolcim says that it believes its staff acted in a manner they believed was in the best interests of the company and its employees.

Following the review, the board has approved the creation of a new Ethics, Integrity & Risk committee, supervised by a member of the Executive Committee. The group will also adopt a more rigorous risk assessment process focusing in particular on high risk third parties and joint venture partners, a restricted party screening program, a new sanctions and export control program and further efforts resulting from a benchmarking exercise it has undertaken.

Finally, LafargeHolcim does not believe that its culpability poses any financial impact to its business. It says that its operations in Syria operated at a loss during the time period in question and represented less than 1% of the group’s sales at the time.

Croatia: HeidelbergCement has appealed against an investigation by the European Commission into the proposed joint purchase with Germany’s Schwenk Zement of Cemex Croatia. The cement producer asserts that by considering Schwenk and itself rather than Duna-Dráva Cement (DDC), a subsidiary that both companies own equally, the commission has given the transaction a ‘Union dimension,’ according to the Official Journal of the European Union. Although DDC is based in Hungary, within the European Union (EU), it imports cement into Croatia (in the EU) from Bosnia & Herzegovina, a country outside of the union. The appeal was made in late December 2016 but only reported in late February 2017.

The European Commission revealed that it was investigating the proposed acquisition of Cemex Croatia by HeidelbergCement and Schwenk in October 2016. The commission was concerned that the transaction would merge the biggest producer in the area with the biggest importer, potentially reducing local competition.

Colombia: Cemex has received a subpoena from the US Securities and Exchange Commission (SEC) seeking information to determine whether there have been any violations of the US Foreign Corrupt Practices Act (FCPA) in relation to a new cement plant being built by Cemex Colombia at Maceo in Antioquia.

In late September 2016 Cemex fired several senior staff members in relation to the Maceo project and its subsidiary’s chief executive resigned. This followed at internal audit and investigation into payments worth around US$20.5m made to a non-governmental third party in connection with the acquisition of the land, mining rights, and benefits of the tax free zone for the project. Cemex referred the situation to the Colombian Attorney General at the same time. The group has also confirmed that it maintains an anti-bribery policy applicable to all of its employees and subsidiaries.s

Brazil: Brazil's antitrust watchdog Cade has decided to end its investigation into 18 companies from the cement sector over alleged anti-competition practices. The allegations were that some of the companies had reached an agreement to refuse to provide three types of cement to competitors outside of an economic group, which would lead to increased prices of the products, according to the Valor Economico newspaper. Cade determined punishments were to be applied to Holcim Brasil, Cimento Tupi and Votorantim Pimentos. However, case leader Paulo Burnier decided that there insufficient evidence to apply sanctions on the majority of companies concerned. He also noted that some of the companies had already been set punishments by Cade for involvement in cartel practices.